Thermo Fisher Buys BRAHMS

Thermo Fisher Scientific Inc. (TMO - Analyst Report) recently agreed to acquire B.R.A.H.M.S. AG for 330 million Euros or about $470 million. B.R.A.H.M.S. is a leading provider of specialty in-vitro diagnostic tests based on its patented biomarkers for sepsis, cardiovascular and pulmonary diseases, as well as intensive care treatments and prenatal screening.

The company is based outside of Berlin in Hennigsdorf, Germany, and has sales offices in Europe and the U.S. With nearly 400 employees serving customers in 65 countries around the world, B.R.A.H.M.S. generated 2008 sales of 75 million Euros or about $105 million. The transaction is expected to be accretive to earnings in 2010.

The news comes a day after diversified US manufacturer Danaher Corp. (DHR - Analyst Report) said it would buy two scientific instrument businesses for a total of $1.1 billion.

B.R.A.H.M.S. is best known for its flagship product, Procalcitonin (PCT), a proprietary biomarker for the diagnosis and treatment of sepsis, a potentially life-threatening condition in which a patient’s bloodstream is overwhelmed by bacterial infection.

PCT test has become the gold standard in Europe for early diagnosis of sepsis, which is critical for patient survival, and subsequent monitoring of treatment. It also has diagnostic tests for cardiovascular and pulmonary diseases, as well as intensive care treatments and prenatal screening -- an area in which PerkinElmer Inc. (PKI - Analyst Report) is one of the world's leading companies.

The European testing model for PCT is expected to be replicated in the U.S., where almost 750,000 cases occur every year and one-third is fatal. B.R.A.H.M.S. also offers diagnostic tests and instrumentation for thyroid, prenatal, autoimmune and oncology screening in both laboratory and point-of-care settings.

B.R.A.H.M.S. is jointly owned by its senior management and a private equity firm. The deal, expected to close late this month, is subject to regulatory approvals and a customary post-closing purchase price adjustment. B.R.A.H.M.S. will be integrated into the Specialty Diagnostics business within Thermo Fisher’s Analytical Technologies Segment. Thermo rival PerkinElmer has also been active on the acquisition front, announcing several small deals a year.

With annual revenue of $10 billion, Thermo Fisher has more than 30,000 employees and serves over 350,000 customers within pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies, as well as environmental and industrial process control settings. We currently have a Neutral recommendation on the stock.

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